EYE ON STOCK
CENSOF Holdings Bhd (Censof; Code: 5195) slipped into correction mode after peaking out temporarily at a two-year high of 42 sen on May 3 following a good rally.
In the wake of an apparent profit-taking activity, the shares succumbed to pressure to retrace back to the 31-sen area on June 21 in a six-week downtrend.
Thereafter, this stock traded mostly rangebound, undergoing consolidation. It settled at 32 sen, up half a sen yesterday.
Based on the daily chart, it looks like Censof has corrected enough while the bulls are building up the momentum for the next leg of uptrend. Initial resistance is expected at the 35-sen barrier, which is the 50-day simple moving average (SMA) line.
A breach of this hurdle will clear the way for prices to challenge the previous rally peak of 42 sen, established on May 3, of which a decisive breakout will signal the resumption of an uptrend, en route to the 67-sen level or a re-test of the historical highs of 74 sen.
So, look out for that, or perhaps, traders can consider taking up a position at current levels, if one is optimistic.
Elsewhere, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were on the rise after triggering a buy at the neutral area yesterday.
The past week saw the 14-day relative strength index touching a low of 38 on Tuesday, followed by a brief sideways before bouncing off to achieve a reading of 60 points yesterday.
Meanwhile, the daily moving average convergence/divergence histogram continued to recover gradually, in tandem with the daily signal line towards the zero threshold. It had issued a buy call earlier of the month.
Technically, Censof shares are poised to advance in the immediate term, with the potential of staging a bullish breakout, given the fact that indicators are improving, albeit on a gradual pace.
As for the downside, the recent lows of 31 sen will act as the current support. A crack of this floor will see the lower 200-day SMA of 28 sen becoming vulnerable. — K.M. Lee The comments above do not represent a recommendation to buy or sell.